Chaotic oscillation in a power system is very harmful for the large-scale interconnected power grid. Here, the basic dynamic properties of the interconnected power system are investigated under the disturbance of electromagnetic power through the Lyapunov exponent spectrum, bifurcation diagram, phase plane, and power spectrum. The sensitivity to the disturbance of electromagnetic power is also studied. Meanwhile, from the sliding mode variable structure control and relay characteristic function, a new method to control the chaotic oscillation is presented, which can quickly and smoothly make the system reach the expected target. Simulation results show that the method can not only shorten the control time, but also reduce the possibility of the impulse response from the system, due to the large parameters. It can inhibit the high-frequency buffeting effectively and has strong robustness.